Australian (ASX) Stock Market Forum

Vanguard Australia: Which Product to Choose?

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Hello,
It's a newbie question for sure so please kindly bear with me. I want to invest $5000 in Vanguard Australia and confused as whether to buy VAS which is being traded on market or just invest $5K in Vanguard Diversified Conservative Index Fund.

Now I just want to invest these $5K and then hold on to it for 10+ years. As I don't have stable income, so I might sometime make any additional contribution or may be not. I, though intend to contribute $200 or so every month. One prime requirement is lowest risk possible. I also would set it to DRP.

I already have ARGO shares for $5K for long haul and set to DRP.

Please kindly let me know your thoughts as which product should I buy at Vanguard Investments. I have been reading at their website for many days and also called them but I would need advice from the members here.

Thanks in advance.

PS. Which product of Vanguard Australia, is Scott talking about in this article?

https://barefootinvestor.com/how-to-invest-guide/index-funds/
 

Darc Knight

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VAS is the Vanguard ASX 300. Buffet suggests similar except the U.S. equivalent. VAS and the Diverisified Conservative fund are poles apart when it comes to risk.
Given your timeframe of 10 plus years VAS is preferable IMO.
But get Fin advise.
 
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VAS is the Vanguard ASX 300. Buffet suggests similar except the U.S. equivalent. VAS and the Diverisified Conservative fund are poles apart when it comes to risk.
Given your timeframe of 10 plus years VAS is preferable IMO.
But get Fin advise.

Thanks Darc, which one is more risky ? VAS or diversified conservative fund?
 

Darc Knight

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VAS is the Vanguard ASX300 index fund so it foklows ASX300 index. The Diversified Conservative fund has local and global shares index funds, local and overseas property index funds and the majority in loxal and overseas fixed interest. So VAS is by far more risky as it's just the ASX300 index fund.
 
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Thank you that’s so helpful. I believe Div conservative fund is for me. One more thing please. If there is a Downturn in market and if I buy $5k worth of div conservative fund then I will get more shares as compared to if I buy during bulk market ? Thanks
 

Darc Knight

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Thank you that’s so helpful. I believe Div conservative fund is for me. One more thing please. If there is a Downturn in market and if I buy $5k worth of div conservative fund then I will get more shares as compared to if I buy during bulk market ? Thanks

Hopefully someone else can confirm this, but I think the market sets the price, as you mentioned. Vanguard has both ETFs and non-ETFs. But hopefully someone else knows for sure.
 
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You'll be lucky to achieve 3% or 4% per annum return in the Conservative Fund, as this fund is comprised 70% bonds. Interest rates are still very low globally, so bond yields may not give you much additional return compared with an online savings account.

If I were you, I'd consider taking a bit more risk given your 10 year investment timeframe, and the fact you will be topping up each month.

The Vanguard Growth Index ETF (VDGR) for example has more exposure to growth assets, however still has 30% in bonds, so not too risky.

upload_2018-6-22_10-43-3.png

The above is only a suggestion, please do not consider this to be personal financial advice. DYOR and/or seek professional advice before committing funds.
 
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